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WE DO THE WORK.(SM)
ANNUAL REPORT 98
[MARSICO FUNDS LOGO]<PAGE>
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[PHOTO]
TABLE OF CONTENTS
Letter to the Shareholders 1
Overview Focus Fund 12
Overview Growth & Income Fund 13
Schedule of Investments 14
Statements of Assets and Liabilities 21
Statements of Operations 22
Statements of Changes in Net Assets 23
Financial Highlights 24
Notes to Financial Statements 25
Report of Independent Accountants 30
Shareholder Services 31
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October 26, 1998
DEAR FELLOW SHAREHOLDERS,
THOMAS F. MARSICO
President and Portfolio Manager; Chairman and Chief Investment Officer of
Marsico Capital Management, LLC. With over 18 years experience in investment
management, Tom is well known for managing large capitalization, focused
portfolios through a combination of macro analysis and individual stock
selection.
We are pleased to present to you our first annual report of the Marsico Funds
for the fiscal year ended September 30, 1998. The Funds, which were launched
on December 31, 1997, significantly outperformed the S&P 500 Index for the
nine months ended September 30. During that period, the Focus Fund gained
23.6%, while the Growth & Income Fund advanced by 15.4%. As a means of
comparison, the S&P 500 Index, which we consider our primary equity benchmark,
posted a return of 6.0%<F1>.
INVESTMENT REVIEW
The year began with large capitalization stocks showing signs that they would
extend the streak of remarkable gains made from 1995-1997, a period in which
the S&P 500 recorded an annualized return in excess of 31%. During the first
quarter of 1998, the S&P 500 -- led by companies such as Coca-Cola, GE, and
Microsoft -- produced a return of 13.9%. Our Funds, which favored the largest
capitalization stocks with "global" franchises, performed extremely well.
Focus Fund was up 23.1%, and Growth & Income Fund increased by 19.6%<F1>.
PERFORMANCE COMPARISON<F1>
Cumulative Returns since inception (12/31/97)
[Performance Graph]
Marsico Focus Fund 23.60%
Marsico Growth & Income Fund 15.40
S&P 500 Index 6.00
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During the second quarter, the investment landscape began to change somewhat.
Volatility returned to the market, and concern grew about possible interest
rate increases by the Federal Reserve. U.S. stocks were mixed, with the S&P
500 gaining 3.3%. However, market leadership was very narrow; the 50 largest
stocks accounted for most of the S&P's performance. The Russell 2000 Index --
a proxy for the performance of small capitalization companies -- declined by
nearly 5% in the quarter. As in the first quarter, our Funds benefited from
strong stock selection. Particular standouts included Lucent Technologies,
MediaOne Group, Home Depot, and Microsoft. Focus Fund and Growth & Income Fund
produced strong returns of 11.7% and 9.5%, respectively, for the quarter<F1>.
The strong nine-month returns highlighted earlier were achieved during
the year's first six months. In the third quarter, the U.S. stock market (as
measured by the S&P 500) sharply reversed course and posted a decline of 9.9%
- -- its worst quarter since 1990. The loss was actually even more severe prior
to a rally in September; for the two-month period in July and August, the S&P
500 declined by more than 15%. Our Funds were not unscathed; the returns for
Focus Fund and Growth & Income Fund fell by 10.1% and 11.8%, respectively, for
the third quarter<F1>.
A remarkable series of events unfolded during the third quarter, the
majority of which created uncertainty and caused stock prices worldwide to
come under tremendous pressure. These included: possible Presidential
impeachment proceedings in the United States, continued economic malaise in
Japan, protracted financial turmoil in Asia and many other emerging markets,
the emergency bail-out of a major hedge fund, profit warnings from many U.S.
corporations, the collapse of the Russian ruble, and growing concern about a
possible global credit crunch. While not all of these events were "new" per
se, the cumulative force of all of them seemingly reaching a
L. KENT MOORE
Senior Analyst and Portfolio Manager of Marsico Capital Management, LLC. Kent
plays an integral role in the investment process focusing primarily on
companies in the technology and energy arenas. His experience in running
companies makes him particularly adept at analyzing financial statements as
well as management expertise.
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crescendo at the same time created an environment in which stocks rapidly
became unattractive to many investors.
While our third quarter performance was negative, it generally was in-
line with the overall market as represented by the S&P 500 Index. A number of
our larger holdings registered strong gains during the quarter, including
Warner Lambert, Time Warner, MediaOne Group, and Microsoft. Companies such as
Cisco Systems and Pfizer, while posting modestly negative returns, still
outperformed the S&P 500 by a wide margin and helped provide a measure of
downside protection.
The Funds' results also were helped by a timely reduction in our
financial services positions. Specifically, we sold several global financial
services stocks in late August. These sales were spurred by our concern over
perceived global market weakness and the companies' exposure to emerging
markets. The trades allowed us to avoid some of the severe price declines
subsequently experienced by these companies' stocks.
We moved cautiously in reinvesting proceeds from the sales of our
financial holdings. We initiated investments in select regional banks that
appeared to have little or no foreign lending,
[PHOTO]
LOOKING FOR STRONG NUMBERS AND STRONG MANAGEMENT
"Our ideal company is one with solid growth potential, a strong balance sheet
to help carry the business through good times and bad, and excellent
management.
"Our approach to evaluating companies, in essence, is a mosaic of
quantitative and qualitative factors. Understanding the numbers is a
critically important part of our process and helps drive our assessment
regarding the sustainability of a company's earnings prospects. Ultimately,
however, we will not invest in a company without having conviction in the
management team. Experience, motivation, leadership and the ability to execute
can sometimes be difficult to quantify precisely, yet these attributes are
vital to our investment decision-making.
"Over time, our research methods enable us to develop a feel for
companies, grounded in both qualitative and quantitative analysis. We are able
to ferret out good ideas and decide whether or not to buy and when it's time
to sell."
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solid balance sheets, and strong managements. Pharmaceutical (e.g., Warner
Lambert, Pfizer) and consumer-related stocks (e.g., Coca-Cola Enterprises)
continued to be important positions in the Funds. The cable and media sectors
were two additional areas that we felt had the ability to produce consistent
year-over-year earnings growth. We also owned several leading technology
companies such as Microsoft, EMC Corporation, and Cisco Systems as of
September 30, 1998.
There were several areas of weakness in the Funds during the quarter
ended September 30, most notably in the transportation sector. Ford Motor
(which had been an outstanding performer for most of the year), Gulfstream
Aerospace, and UAL, three of our more significant holdings, underperformed the
market by a considerable margin and were prime reasons for the Funds' overall
market-like results.
THE MARSICO APPROACH
The recent market turmoil underscores the importance of rigorous, hands-on
company analysis -- the linchpin of the way we manage the Funds. We seek to
invest in "tomorrow's growth stocks," i.e., companies that are experiencing
a positive funda-
[PHOTO]
SEARCHING FOR CREATIVITY, PASSION AND CONVICTION
"We are looking for investment ideas today that will be obvious to the
investment community tomorrow. Part of the process of identifying leading
companies is finding managements that possess certain important
characteristics.
"First, we're looking for creative managements that provide an
environment where talented employees can flourish. Second, we want managers
who run their businesses with conviction through good times and bad. And
third, we look for managers who have passion for their businesses.
"Our job also is to concentrate every day on the companies we follow so
that there are few, if any, surprises. That's what gives us the conviction to
stay with our best ideas."
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JEFFRY S. STRAUSS
Senior Analyst and Portfolio Manager of Marsico Capital Management, LLC.
Jeff brings almost 20 years of experience to the Marsico Funds. Jeff
specializes in companies that are undergoing positive fundamental change that
is not reflected in the current stock price.
mental change that will lead to improved earnings growth but is not reflected
in the current stock price.
We start the process of assembling portfolios by assessing various
economic, political and social factors. These include global trends, interest
rates, inflation, the regulatory environment, and the competitive landscape.
The "macro" observations help us form an overall strategic backdrop for our
actual portfolio construction.
Once we have formed a macroeconomic view, our goal is to think
creatively in developing related investment themes, and then to target
industries that we think will benefit from the trends we see occurring in the
world. From there, we intensively analyze a variety of individual companies.
Attributes we are seeking include: specific market expertise/dominance,
franchise durability, pricing power, strong fundamentals (e.g., strong balance
sheet, improving return on equity, ability to generate free cash flow),
excellent management, and reasonable valuations in the context of projected
growth rates. The end result is a portfolio of high quality, well-managed
companies with the potential to produce above-average returns.
We pride ourselves on both the breadth and depth of our company
knowledge. We make extensive use of our worldwide network of contacts,
including the chief executive officers and chief financial officers of many
major corporations. But we don't just stop there. We also may talk with and
evaluate company division heads, employees, customers, suppliers,
distributors, and competitors. All of this effort is focused on one objective
- -- gaining as clear and well-grounded a picture of a company as possible.
One of our most valuable research tools is the detailed earnings and
cash flow models we maintain for many of the companies we follow. Each model
is customized by individual company, and results from product-by-product and
division-by-division analysis performed by our investment team. The models are
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intended to describe a company's past, present, and future. At bottom, they
help us ascertain the slope of a company's growth curve. The models include
extensive quantitative information. Equally important are detailed footnotes,
which supplement the "numbers." These narratives reflect our updated
interpretation of corporate data, and act as a diary of our thoughts about a
company over time.
In selecting stocks for the Funds, we think there is no substitute for
direct, comprehensive, and disciplined analysis. We do not rely on computer-
based screening techniques, ratio-driven analysis, or Wall Street research in
order to generate investment ideas. We believe that our approach fosters
creative, innovative thinking, which in turn leads us to promising areas that
frequently are not well followed or well understood by other investors.
In addition, we are firm believers in concentrating the Funds in our
highest-conviction investment ideas. Each individual holding in the Funds has
an important bearing on how well the Funds perform. On September 30, 1998, for
example, in addition to cash and cash equivalents, the Focus Fund held 24
stocks and the Growth & Income Fund owned 36 equities and three bonds.
While we own a relatively small number of stocks, we are highly
conscious of the importance of prudent diversification. We do not focus on
just one sector, but allocate investments across several different areas that,
in our opinion, offer the most dynamic growth opportunities. So, while our
portfolios are anchored by stable growth companies such as pharmaceutical
firms, they also typically have representation in more aggressive growth
companies -- such as technology and other fields -- and organizations
undergoing a transformation (e.g., new product, new management team,
acquisition) that we believe will vastly improve their earnings prospects. A
good example of the latter category, in our judgment, is the cable/media
sector.
JAMES A. HILLARY
Senior Analyst and Portfolio Manager of Marsico Capital Management, LLC.
Jim brings his broad exposure to different industries to the investment
process. Jim has been instrumental in building and organizing an extensive
database of financial models and other corporate information about companies
the investment team is considering or has acquired.
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INVESTMENT OUTLOOK
Looking ahead, we continue to believe there are important strengths to build
on in the U.S. economy that should augur well for financial markets over the
long run. We have a Federal budget surplus for the first time in almost three
decades. Technology is spurring productivity enhancements. Inflation and
interest rates are low and trending lower. The U.S. employment rate is high.
The consumer sector is strong. Moreover, when the Federal Reserve cut interest
rates in September and October, it unequivocally signaled its willingness to
assume a leadership position in addressing global financial concerns.
While these positive factors may help to temper the recent market
turmoil, we do anticipate that the U.S. stock market will continue to exhibit
high levels of volatility. The various "macro" concerns outlined earlier,
combined with the release of quarterly corporate earnings announcements, will
place a premium on prudent stock selection, sound diversification, and the
willingness to "stick with" a long-term time horizon. My team and I have
recently met with the managements of virtually all the companies we own in
order to reassess directly each company's earnings
[PHOTO]
SCRUTINIZING TOP-LINE AND BOTTOM-LINE GROWTH
"Our goal is to find companies with sustainable top-line and bottom-line
growth. Once we've identified leading companies in industries that may benefit
from trends we foresee in the macroeconomic environment, we rank those
companies. Then, we further refine our list to top-tier companies with good
managements in good businesses. If a closer look is warranted, we develop a
comprehensive earnings and cash-flow model that scrutinizes the company's top-
line and bottom-line growth prospects.
"Next, we compare our results with Wall Street's expectations. If our
research produces a different conclusion that gives us an edge, we are likely
to make a big investment in the stock.
"The models we maintain for many of our investments help us forecast
the future. They provide a diary of the past. And they give us a means of
stimulating and assessing ongoing dialogues with management."
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outlook. We believe that the companies we own in the Funds are high quality
organizations, have sustainable earnings growth, offer unique or proprietary
products, have solid underlying fundamentals, and are led by highly motivated,
experienced managements capable of delivering in difficult market
environments.
At the Marsico Funds, our focus will always be on these kinds of
superior companies, whose worth could eventually be recognized by other
investors, even if markets continue to struggle in the short-term. The Funds
have our undivided attention every single day.
To keep in touch with our latest thinking and be up-to-date on your
investment in the Marsico Funds, I encourage you to visit our website:
www.marsicofunds.com. We think the information it provides will be useful for
you.
We appreciate the trust and confidence you have placed in us. You have
our promise that we will continue to do the work. . . for you.
Sincerely,
/s/ Thomas F. Marsico
THOMAS F. MARSICO
Chairman and Chief Investment Officer
[FN]
<F1> The Marsico Funds commenced operations on December 31, 1997. Returns for
the Marsico Funds are based on net change in NAV and are unannualized,
represent past performance and should not be considered as representative
of future results. Performance figures for each of the three quarters and
the nine month period for the Growth & Income Fund, and for the quarter
ended March 31 for the Focus Fund, reflect fee waivers in effect. In the
absence of fee waivers, total returns would be reduced. The investment
return and principal value of an investment in the Marsico Funds will
fluctuate so that an investor's shares, when redeemed, may be worth more
or less than their original cost. The S&P 500 Index is an unmanaged index
of 500 selected common stocks, most of which are listed on the New York
Stock Exchange. The results for this index do not reflect any fees or
expenses. It is not possible to make a direct investment in an index.
References to specific securities or industries should not be considered
recommendations to buy or sell any securities.
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THE INVESTMENT PROCESS
Marsico Capital Management's research process for the Funds incorporates many
elements. Some are specific to the company whose stock we own, while others
are more "macro"-oriented. We are constantly re-testing our original thesis
for owning a company; these reappraisals are designed to reflect as many
viewpoints and perspectives as possible. At times, we will uncover something
new about a company that may cause us to fundamentally alter our opinion about
it, or lead us to another investment.
The evaluation of Boeing Corporation is an example of the type of analytical
process we apply continually to our investments. As our team members were
evaluating a number of variables affecting Boeing, they began focusing on
suppliers to Boeing, such as Cytec Industries, Honeywell, and AlliedSignal.
Numerous discussions with these suppliers led us to believe that Boeing would
experience production problems and that earnings would eventually be adversely
affected. The position in Boeing was ultimately sold; we then began
accumulating significant positions in the airline industry, an area that -- in
our judgment -- offered compelling value and growth opportunities.
Close examination of the airline sector indicated to us that long-term
industry dynamics had never been better. Many airlines were enjoying strong
growth in their hubs and increased yields. Capacity was being redeployed to
more profitable routes on relatively short notice. Jet fuel costs were low.
And, domestic airlines were one of the few remaining industries with pricing
stability -- a big plus in a potentially deflationary environment. Further,
airlines were enormous generators of free cash flow, which could be used in a
variety of ways -- debt paydowns, stock buybacks -- to create shareholder
value. Finally, we believed airline stocks were substantially undervalued;
as a group, these stocks traded at substantial discounts to the overall market.
See graphical representation on following page.
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INVESTMENT DECISION
MACRO INFLUENCES
Macro Influences appeared generally positive for Boeing. Factors such as lower
oil prices, declining interest rates, and industry deregulation all suggested
there would be strong demand for new airplanes. In addition, major carriers
such as UAL had older aircraft, particularly 727s and DC-10s, which would need
to be replaced.
[PHOTO]
SUPPLIERS
Suppliers of Boeing, on the other hand, indicated to us that Boeing was
holding off on accepting previously ordered airplane parts/components. This
suggested that Boeing's production was falling behind schedule, and that the
company would complete far fewer planes than management anticipated.
[PHOTO]
MANAGEMENT
Management at Boeing was optimistic that the company would be able to meet an
ambitious production schedule for manufacturing new planes.
[PHOTO]
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INDUSTRY FACTORS
Industry Factors, however, seemed less positive. The lack of new landing slots
at major airports, coupled with the fact that most U.S. airlines were
upgrading -- but not increasing -- their fleets, to us signaled potentially
slowing demand for new planes.
[PHOTO]
CUSTOMERS
In addition, international customers whose business was disrupted by financial
turmoil in Asia were beginning to cancel orders for new planes.
[PHOTO]
COMPETITORS
Finally, Boeing's sole competitor, Europe's government-subsidized Airbus, was
selling planes at dramatically reduced prices and starting to take market
share from Boeing.
[PHOTO]
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OVERVIEW FOCUS FUND as of September 30, 1998
FUND OBJECTIVE
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The Focus Fund is a non-diversified fund that seeks long-term growth
of capital.
GROWTH OF $10,000<F1>
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[GRAPH]
PERFORMANCE COMPARISON
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Marsico Focus Fund 23.6%
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S&P 500 Index 6.0
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TOTAL NET ASSETS
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9/30/98 $858,256,658
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NET ASSET VALUE
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Net Asset Value per Share $12.36
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TOP FIVE HOLDINGS
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EMC Corporation 10.0%
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Time Warner Inc. 8.2
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MediaOne Group, Inc. 7.1
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Warner-Lambert Company 6.1
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Ford Motor Company 5.7
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SECTOR ALLOCATION<F2>
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Technology 27.4%
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Consumer Staples 24.6
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Consumer Cyclicals 15.7
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Health Care 10.0
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Financials 9.9
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Capital Goods 8.0
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Transportation 4.4
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[FN]
<F1> This chart assumes an initial investment of $10,000 made on December 31,
1997 (commencement of operations). Returns for the Marsico Funds are based on
net change in NAV and are unannualized, represent past performance and should
not be considered as representative of future results. Performance figures for
each of the three quarters and the nine month period for the Growth & Income
Fund, and for the quarter ended March 31 for the Focus Fund, reflect fee
waivers in effect. In the absence of fee waivers, total returns would be
reduced. The investment return and principal value of an investment in the
Marsico Funds will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
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OVERVIEW GROWTH & INCOME FUND as of September 30, 1998
FUND OBJECTIVE
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The Growth & Income Fund is a diversified fund that seeks growth of capital
with a limited emphasis on income. Although the Fund normally invests at least
25% of its total assets in securities that have income potential, it
emphasizes equity securities selected for their growth potential.
GROWTH OF $10,000<F1>
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[GRAPH]
PERFORMANCE COMPARISON
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Marsico Growth & Income Fund 15.4%
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S&P 500 Index 6.0
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TOTAL NET ASSETS
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9/30/98 $263,519,207
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NET ASSET VALUE
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Net Asset Value per Share $11.54
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TOP FIVE HOLDINGS
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Time Warner, Inc. 5.2%
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EMC Corporation 4.5
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Microsoft Corporation 4.1
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MediaOne Group, Inc. 4.0
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Warner-Lambert Company 3.5
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SECTOR ALLOCATION<F2>
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Technology 23.1%
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Consumer Cyclicals 21.0
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Consumer Staples 15.3
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Financials 13.5
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Health Care 10.6
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Transportation 7.3
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Capital Goods 5.5
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Energy 3.7
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[FN]
<F2> Sector weightings represent the percentage of the Funds' equity
investments in certain general sectors. These sectors may include more than
one industry. The Funds' portfolio composition is subject to change at any
time.
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<TABLE>
MARSICO FOCUS FUND September 30, 1998
SCHEDULE OF INVESTMENTS
<CAPTION>
Number of Market Value Percent of
Shares in Dollars Net Assets
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<S> <C> <C> <C>
COMMON STOCKS
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AEROSPACE AND DEFENSE
Gulfstream Aerospace Corporation<F*> 1,007,570 $40,554,693 4.72%
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AIRLINES
UAL Corporation<F*> 556,265 36,052,925 4.20
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AUTOMOTIVE -- CARS & LIGHT TRUCKS
Ford Motor Company 1,043,278 48,968,861 5.70
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BEVERAGES -- NON-ALCOHOLIC
Coca-Cola Enterprises Inc. 957,958 24,188,439 2.82
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BREWERY
Anheuser-Busch Companies, Inc. 441,665 23,849,910 2.78
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CABLE TELEVISION
MediaOne Group, Inc.<F*> 1,374,630 61,085,121 7.12
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COMPUTER SOFTWARE
Microsoft Corporation<F*> 395,053 43,480,521 5.07
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COMPUTERS -- INFORMATION TECHNOLOGY
IMS Health Inc. 346,241 21,445,302 2.50
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COMPUTERS -- MEMORY DEVICES
EMC Corporation<F*> 1,500,375 85,802,695 10.00
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COMPUTERS -- MICRO
International Business Machines
Corporation 213,591 27,339,648 3.18
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COSMETICS & TOILETRIES
L'OREAL 49,778 23,156,486 2.70
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CRUISE LINES
Carnival Corporation 1,123,136 35,729,764 4.16
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DIVERSIFIED FINANCIAL SERVICES
Associates First Capital Corporation 652,955 42,605,314 4.96
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DIVERSIFIED MANUFACTURING OPERATIONS
General Electric Company 319,134 25,391,099 2.96
- --------------------------------------------------------------------------------
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<CAPTION>
MARSICO FOCUS FUND September 30, 1998
SCHEDULE OF INVESTMENTS (CONTINUED)
Number of Market Value Percent of
Shares in Dollars Net Assets
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
MEDICAL -- DRUGS
Pfizer Inc. 289,749 $ 30,695,285 3.58%
Warner-Lambert Company 688,936 52,014,668 6.06
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82,709,953 9.64
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MULTIMEDIA
Time Warner Inc. 804,452 70,439,828 8.21
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NETWORKING PRODUCTS
Cisco Systems, Inc.<F*> 688,170 42,537,508 4.96
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RETAIL -- APPAREL/SHOE
The Gap, Inc. 223,987 11,815,314 1.38
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RETAIL -- BUILDING PRODUCTS
The Home Depot, Inc. 575,329 22,725,495 2.65
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SUPER-REGIONAL BANKS
Norwest Corporation 728,044 26,073,076 3.04
U.S. Bancorp 347,247 12,348,971 1.44
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38,422,047 4.48
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TELECOMMUNICATION EQUIPMENT
Lucent Technologies Inc. 73,502 5,076,232 0.59
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TOTAL COMMON STOCKS (COST $827,524,811) 813,377,155 94.78
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PREFERRED STOCKS
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AUTOMOTIVE -- CARS & LIGHT TRUCKS
Porsche AG 5,777 10,032,217 1.17
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TOTAL PREFERRED STOCKS (COST $10,084,388) 10,032,217 1.17
- --------------------------------------------------------------------------------
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<CAPTION>
MARSICO FOCUS FUND September 30, 1998
SCHEDULE OF INVESTMENTS (CONTINUED)
Principal/ Market Value Percent of
Shares in Dollars Net Assets
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<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
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SSgA Money Market Fund 65,088 $ 65,088 0.00%
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Federal Home Loan Bank,
4.95%, 10/1/98 $18,000,000 18,000,000 2.10
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TOTAL SHORT-TERM INVESTMENTS
(COST $18,065,088) 18,065,088 2.10
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TOTAL INVESTMENTS (COST $855,674,287) 841,474,460 98.05
Other Assets less Liabilities 16,782,198 1.95
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NET ASSETS $858,256,658 100.00%
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<FN>
<F*>Non-income producing.
See notes to financial statements.
</TABLE>
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<TABLE>
MARSICO GROWTH & INCOME FUND September 30, 1998
SCHEDULE OF INVESTMENTS
<CAPTION>
Number of Market Value Percent of
Shares in Dollars Net Assets
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<S> <C> <C> <C>
COMMON STOCKS
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AEROSPACE AND DEFENSE
Gulfstream Aerospace Corporation<F*> 191,916 $ 7,724,619 2.93%
- --------------------------------------------------------------------------------
AIRLINES
Delta Air Lines, Inc. 64,823 6,304,037 2.39
UAL Corporation<F*> 75,815 4,913,760 1.87
--------------------------
11,217,797 4.26
- --------------------------------------------------------------------------------
APPLICATIONS SOFTWARE
PeopleSoft, Inc.<F*> 124,825 4,072,416 1.54
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AUTOMOTIVE -- CARS & LIGHT TRUCKS
Chrysler Corporation 106,882 5,116,976 1.94
Ford Motor Company 190,070 8,921,411 3.39
General Motors Corporation 91,060 4,979,844 1.89
--------------------------
19,018,231 7.22
- --------------------------------------------------------------------------------
BEVERAGES -- NON-ALCOHOLIC
Coca-Cola Enterprises Inc. 133,474 3,370,219 1.28
- --------------------------------------------------------------------------------
BREWERY
Anheuser-Busch Companies, Inc. 129,546 6,995,484 2.65
- --------------------------------------------------------------------------------
BUILDING -- RESIDENTIAL/COMMERCIAL
M.D.C. Holdings, Inc. 265,188 4,889,404 1.86
- --------------------------------------------------------------------------------
CABLE TELEVISION
MediaOne Group, Inc.<F*> 237,531 10,555,284 4.01
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE
Microsoft Corporation<F*> 97,941 10,779,631 4.09
- --------------------------------------------------------------------------------
COMPUTERS -- INFORMATION TECHNOLOGY
IMS Health Inc. 119,448 7,398,310 2.81
- --------------------------------------------------------------------------------
COMPUTERS -- MEMORY DEVICES
EMC Corporation<F*> 208,900 11,946,469 4.53
- --------------------------------------------------------------------------------
COMPUTERS -- MICRO
International Business Machines
Corporation 54,088 6,923,264 2.63
- --------------------------------------------------------------------------------
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<CAPTION>
MARSICO GROWTH & INCOME FUND September 30, 1998
SCHEDULE OF INVESTMENTS (CONTINUED)
Number of Market Value Percent of
Shares in Dollars Net Assets
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
CRUISE LINES
Carnival Corporation 204,043 $ 6,491,118 2.46%
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES
Associates First Capital Corporation 80,144 5,229,396 1.98
- --------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING OPERATIONS
General Electric Company 70,327 5,595,392 2.12
- --------------------------------------------------------------------------------
FINANCE -- CREDIT CARD
MBNA Corporation 121,651 3,482,260 1.32
- --------------------------------------------------------------------------------
FINANCE -- MORTGAGE LOAN BANKER
Fannie Mae 69,618 4,472,956 1.70
- --------------------------------------------------------------------------------
HOTELS & MOTELS
Four Seasons Hotels, Inc. 69,472 1,424,176 0.54
- --------------------------------------------------------------------------------
MEDICAL -- DRUGS
Pfizer Inc. 72,429 7,672,947 2.91
Schering-Plough Corporation 83,556 8,653,268 3.28
Warner-Lambert Company 121,609 9,181,479 3.49
--------------------------
25,507,694 9.68
- --------------------------------------------------------------------------------
MULTIMEDIA
Time Warner Inc. 157,451 13,786,803 5.23
- --------------------------------------------------------------------------------
NETWORKING PRODUCTS
Cisco Systems, Inc.<F*> 114,544 7,080,282 2.69
- --------------------------------------------------------------------------------
OIL COMPANIES -- INTEGRATED
British Petroleum Company PLC 102,510 8,943,997 3.39
- --------------------------------------------------------------------------------
RADIO
Clear Channel Communications, Inc.<F*> 43,650 2,073,375 0.79
- --------------------------------------------------------------------------------
RENTAL -- AUTO & EQUIPMENT
The Hertz Corporation 174,418 7,216,545 2.74
- --------------------------------------------------------------------------------
RETAIL -- APPAREL/SHOE
The Gap, Inc. 89,092 4,699,603 1.78
- --------------------------------------------------------------------------------
RETAIL -- BUILDING PRODUCTS
The Home Depot, Inc. 173,946 6,870,867 2.61
- --------------------------------------------------------------------------------
18
<PAGE>
<PAGE>
<CAPTION>
MARSICO GROWTH & INCOME FUND September 30, 1998
SCHEDULE OF INVESTMENTS (CONTINUED)
Number of Market Value Percent
Shares in Dollars of Net Assets
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
SUPER-REGIONAL BANKS
Northern Trust Corporation 113,714 $ 7,760,980 2.95%
Norwest Corporation 184,261 6,598,847 2.50
U.S. Bancorp 139,502 4,961,040 1.88
----------------------------
19,320,867 7.33
- --------------------------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT
Lucent Technologies Inc. 109,037 7,530,368 2.86
- --------------------------------------------------------------------------------
TRANSPORTATION -- RAIL
Kansas City Southern Industries, Inc. 182,380 6,383,300 2.42
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $244,161,306) 241,000,127 91.45
- --------------------------------------------------------------------------------
<CAPTION>
Principal Amount Market Value Percent
in Dollars in Dollars of Net Assets
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE BONDS
- --------------------------------------------------------------------------------
BUILDING -- RESIDENTIAL/COMMERCIAL
M.D.C. Holdings, Inc., 8.375%, 2/1/08 $ 2,700,000 2,598,750 0.98
- --------------------------------------------------------------------------------
RESORTS/THEME PARKS
Premier Parks, Inc., 12.000%, 8/15/03 2,400,000 2,604,000 0.99
- --------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(COST $5,239,693) 5,202,750 1.97
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS
- --------------------------------------------------------------------------------
U.S. Treasury Bonds, 5.50%, 8/15/28 10,899,000 11,756,228 4.46
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(COST $11,756,238) 11,756,228 4.46
- --------------------------------------------------------------------------------
19
<PAGE>
<PAGE>
<CAPTION>
MARSICO GROWTH & INCOME FUND September 30, 1998
SCHEDULE OF INVESTMENTS (CONTINUED)
Principal/ Market Value Percent of
Shares in Dollars Net Assets
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
- --------------------------------------------------------------------------------
SSgA Money Market Fund 23,005 $ 23,005 0.01%
- --------------------------------------------------------------------------------
Federal Home Loan Bank,
4.95%, 10/1/98 $36,700,000 36,700,000 13.93
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $36,723,005) 36,723,005 13.94
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $297,880,242) 294,682,110 111.82
Liabilities less Other Assets (31,162,903) (11.82)
---------------------------
NET ASSETS $263,519,207 100.00%
- --------------------------------------------------------------------------------
<FN>
<F*>Non-income producing.
See notes to financial statements.
</TABLE>
20
<PAGE>
<PAGE>
<TABLE>
MARSICO FUNDS September 30, 1998
STATEMENTS OF ASSETS AND LIABILITIES
<CAPTION>
Growth &
Focus Fund Income Fund
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (cost $855,674,287 and
$297,880,242, respectively) $841,474,460 $294,682,110
Interest and dividends receivable 201,897 206,898
Receivable for investments sold 24,748,502 20,555,721
Receivable for capital stock sold 3,237,230 2,341,762
Organizational expenses, net of
accumulated amortization 117,008 117,008
Prepaid expenses and other assets 121,517 41,026
--------------------------------
TOTAL ASSETS 869,900,614 317,944,525
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 5,735,060 53,218,545
Payable for capital stock redeemed 4,600,812 795,585
Accrued investment advisory fee 578,888 138,423
Accrued distribution fee 200,107 59,828
Accrued expenses and other liabilities 529,089 212,937
--------------------------------
TOTAL LIABILITIES 11,643,956 54,425,318
- --------------------------------------------------------------------------------
NET ASSETS $858,256,658 $263,519,207
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- --------------------------------------------------------------------------------
Paid-in-capital $912,084,861 $281,804,013
Accumulated net realized loss on investments (40,064,112) (15,144,125)
Accumulated net realized gain on foreign
currency transactions 433,914 57,257
Net unrealized depreciation on investments and
foreign currency translations (14,198,005) (3,197,938)
--------------------------------
NET ASSETS $858,256,658 $263,519,207
- --------------------------------------------------------------------------------
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 69,444,196 22,832,879
NET ASSET VALUE, REDEMPTION PRICE, AND
OFFERING PRICE PER SHARE (NET ASSETS/
SHARES OUTSTANDING) $ 12.36 $ 11.54
See notes to financial statements.
</TABLE>
21
<PAGE>
<PAGE>
<TABLE>
MARSICO FUNDS Period Ended September 30, 1998<F*>
STATEMENTS OF OPERATIONS
<CAPTION>
Growth &
Focus Fund Income Fund
- --------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 1,585,603 $ 650,283
Dividends (net of $25,835 and $9,949 of
non-reclaimable foreign withholding taxes) 2,338,610 598,844
--------------------------------
TOTAL INVESTMENT INCOME 3,924,213 1,249,127
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 2,590,083 774,854
Distribution fees 761,789 227,898
Transfer agent fees and expenses 565,809 194,772
Federal and state registration fees 333,695 114,038
Printing and postage expenses 110,314 35,320
Fund administration fees 168,841 96,299
Custody and fund accounting fees 95,468 52,745
Professional fees 53,346 53,346
Trustees' fees and expenses 46,593 46,593
Amortization of organizational costs 20,581 20,581
Miscellaneous 9,831 6,057
--------------------------------
TOTAL EXPENSES 4,756,350 1,622,503
Less waiver of fees -- (249,672)
Less expenses paid indirectly (18,219) (5,442)
--------------------------------
NET EXPENSES 4,738,131 1,367,389
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (813,918) (118,262)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized loss on investments (40,087,882) (15,147,236)
Net realized gain on foreign currency
transactions 433,914 57,257
Change in unrealized depreciation on
investments and foreign
currency translations (14,198,005) (3,197,938)
------------ ------------
Net Loss on Investments (53,851,973) (18,287,917)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS $(54,665,891) $(18,406,179)
<FN>
<F*>From December 31, 1997 (commencement of operations).
See notes to financial statements.
</TABLE>
22<PAGE>
<PAGE>
<TABLE>
MARSICO FUNDS Period Ended September 30, 1998<F*>
STATEMENTS OF CHANGES
IN NET ASSETS
<CAPTION>
Growth &
Focus Fund Income Fund
- ----------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ----------------------------------------------------------------------------------------
Net investment loss $ (813,918) $ (118,262)
Net realized loss on investments (40,087,882) (15,147,236)
Net realized gain on foreign currency transactions 433,914 57,257
Change in unrealized depreciation on investments
and foreign currency translations (14,198,005) (3,197,938)
----------------------------------
Net decrease in net assets resulting from operations (54,665,891) (18,406,179)
- ----------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ----------------------------------------------------------------------------------------
Proceeds from sale of shares 1,280,834,349 368,490,350
Redemption of shares (367,961,800) (86,614,964)
----------------------------------
Net increase from capital share transactions 912,872,549 281,875,386
- ----------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 858,206,658 263,469,207
NET ASSETS
- ----------------------------------------------------------------------------------------
Beginning of period 50,000 50,000
----------------------------------
END OF PERIOD $ 858,256,658 $263,519,207
- ----------------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
- ----------------------------------------------------------------------------------------
Shares sold 97,469,724 29,846,080
Shares redeemed (28,030,528) (7,018,201)
----------------------------------
NET INCREASE 69,439,196 22,827,879
- ----------------------------------------------------------------------------------------
<FN>
<F*>From December 31, 1997 (commencement of operations)
See notes to financial statements.
23<PAGE>
<PAGE>
</TABLE>
<TABLE>
MARSICO FUNDS Period Ended September 30, 1998<F*>
FINANCIAL HIGHLIGHTS
For a Fund Share Outstanding Throughout the Period.
<CAPTION>
Growth &
Focus Fund Income Fund
- ----------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------
Net investment loss (0.01) (0.01)
Net realized and unrealized gains on investments 2.37 1.55
----------------------------
Total from investment operations 2.36 1.54
----------------------------
NET ASSET VALUE, END OF PERIOD $12.36 $11.54
- ----------------------------------------------------------------------------------------
TOTAL RETURN<F1> 23.60% 15.40%
SUPPLEMENTAL DATA AND RATIOS
- ----------------------------------------------------------------------------------------
Net assets, end of period (000s) $858,257 $263,519
Ratio of expenses to average net assets, less
waivers and before expenses paid indirectly<F2>, <F3> 1.56% 1.51%
Ratio of net investment loss to average net assets,
net of waivers and expenses paid indirectly<F2> (0.27)% (0.14)%
Ratio of expenses to average net assets, before
waivers and expenses paid indirectly<F2> 1.56% 1.78%
Ratio of net investment loss to average net assets,
before waivers and expenses paid indirectly<F2> (0.27)% (0.41)%
Portfolio turnover rate<F1> 170% 141%
<FN>
<F1> Not annualized
<F2> Annualized
<F3> The ratio of Net Expenses to average net assets was 1.56% and 1.50% for the Focus Fund and
the Growth & Income Fund, respectively. Net Expenses represent Total Expenses less waiver
of fees and expenses paid indirectly.
<F*>From December 31, 1997 (commencement of operations).
See notes to finanical statements.
</TABLE>
24<PAGE>
<PAGE>
MARSICO FUNDS September 30, 1998
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
- -------------------------------------------------------------------------
The Marsico Investment Fund (the "Trust") was organized on October 1,
1997 as a Delaware Business Trust and is registered under the Investment
Company Act of 1940, as amended (the "1940 Act") as an open-end
management investment company. The Focus Fund and the Growth & Income
Fund (collectively, the "Funds") are separate investment portfolios of
the Trust. The Focus Fund is a non-diversified fund that seeks long-term
growth of capital by normally investing in a core position of 20-30
common stocks. The Growth & Income Fund is a diversified fund, as
defined in the 1940 Act, that seeks long-term growth of capital with a
limited emphasis on income. The Funds commenced operations on December
31, 1997.
2. SIGNIFICANT ACCOUNTING POLICIES
- -------------------------------------------------------------------------
The following is a summary of significant accounting policies
consistently followed by the Funds in the preparation of their financial
statements. These policies are in conformity with generally accepted
accounting principles ("GAAP") for investment companies. The
presentation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.
(a) Investment Valuation -- A security traded on a recognized stock
exchange is valued at the last sale price prior to the time when
assets are valued on the principal exchange on which the security
is traded. If no sale is reported on the valuation date, the most
current bid price will be used. All other securities for which
over-the-counter market quotations are readily available are valued
at the most current closing price. Debt securities which will
mature in more than 60 days are valued
25
<PAGE>
<PAGE>
at prices furnished by a pricing service. Securities which will
mature in 60 days or less are valued at amortized cost, which
approximates market value. Any securities for which market
quotations are not readily available are valued at their fair value
as determined in good faith by the Funds' investment adviser
pursuant to guidelines established by the Board of Trustees.
(b) Organization Costs -- Costs incurred by the Funds in connection
with their organization, registration and the initial public
offering of shares have been deferred and will be amortized over
the period of benefit, but not to exceed five years. If any of the
original shares of a Fund are redeemed by any holder thereof prior
to the end of the amortization period, the redemption proceeds will
be reduced by the pro rata share of the unamortized expenses as of
the date of redemption. The pro rata share by which the proceeds
are reduced will be derived by dividing the number of original
shares of the Funds being redeemed by the total number of original
shares outstanding at the time of redemption.
(c) Expenses -- The Funds are charged for those expenses that are
directly attributable to each fund, such as advisory and custodian
fees. Expenses that are not directly attributable to a fund are
typically allocated among the funds in proportion to their
respective net assets. The Funds' expenses may be reduced by
voluntary Advisory waivers and uninvested cash balances earning
interest or credits. Such credits are included in Expenses Paid
Indirectly in the Statement of Operations.
(d) Federal Income Taxes -- Each Fund intends to comply with the
requirements of the Internal Revenue Code necessary to qualify
as a regulated investment company and to make the requisite
distributions of income to its shareholders which will be
sufficient to relieve it from all or substantially all federal and
state income and excise taxes.
(e) Distributions to Shareholders -- Dividends from net investment
income and net realized capital gains, if any, will be declared and
paid at least annually. Distributions to shareholders are recorded
on the ex-dividend date. Each Fund may periodically make
reclassifications among certain of its capital accounts as a result
of the timing and characterization of certain income and capital
gains distributions determined in
26
<PAGE>
<PAGE>
accordance with federal tax regulations, which may differ from
GAAP. These reclassifications are due to differing treatments for
items such as deferral of wash sales, foreign currency
transactions, net operating losses, and Post-October capital
losses. Accordingly, at September 30, 1998, reclassifications were
recorded to decrease net investment loss by $813,918 and $118,262,
decrease accumulated net realized loss on investments by $23,770
and $3,111 and decrease paid-in capital by $837,688 and $121,373 in
the Focus and Growth & Income Funds, respectively.
(f) Forward Currency Transactions and Futures Contracts -- The Funds
enter into forward currency contracts in order to reduce their
exposure to changes in foreign currency exchange rates on their
foreign holdings and to lock in the U.S. dollar cost of firm
purchase and sale commitments for securities denominated in foreign
currencies. A forward currency contract is a commitment to purchase
or sell a foreign currency at a future date at a negotiated forward
rate. The gain or loss arising from the difference between the U.S.
dollar cost of the original contract and the value of the foreign
currency in U.S. dollars upon closing of such contract is included
in net realized gain or loss from foreign currency transactions.
Forward currency contracts held by the Funds are fully
collateralized by other securities. If held by the Funds, such
collateral would be in the possession of the Funds' custodian. The
collateral would be evaluated daily to ensure its market value
equals or exceeds the current market value of the corresponding
forward currency contracts.
Currency gain and loss is also calculated on payables and
receivables that are denominated in foreign currencies. The payables
and receivables are generally related to security transactions and
income. The change in net appreciation/depreciation of the payables
and receivables is recorded as unrealized appreciation/depreciation
on investments and foreign currency translations.
Futures contracts are marked to market daily and the resultant
variation margin is recorded as an unrealized gain or loss. When a
contract is closed, a realized gain or loss is recorded equal to
the difference between the opening and closing value of the
contract. Generally, open forward and futures contracts are marked
to market (i.e., treated as realized and subject to distribution)
for federal income tax purposes at fiscal year end.
Foreign-denominated assets and forward currency contracts may
involve more
27
<PAGE>
<PAGE>
risks than domestic transactions, including currency risk,
political and economic risk, regulatory risk and market risk. Risks
may arise from the potential inability of a counterparty to meet
the terms of a contract and from unanticipated movements in the
value of foreign currencies relative to the U.S. dollar.
The Funds may enter into "futures contracts" and "options" on
securities, financial indexes and foreign currencies, forward
contracts, and interest rate swaps and swap-related products. The
Funds intend to use such derivative instruments primarily to hedge
or protect from adverse movements in securities prices, currency
rates or interest rates. The use of futures contracts and options
may involve risks such as the possibility of illiquid markets or
imperfect correlation between the value of the contracts and the
underlying securities, or that the counterparty will fail to
perform its obligations.
(g) Other -- Investment transactions are accounted for on a trade date
basis. Each Fund determines the gain or loss realized from the
investment transactions by comparing the original cost of the
security lot sold with the net sale proceeds. Dividend income is
recognized on the ex-dividend date. Certain dividends from foreign
securities will be recorded as soon as the Trust is informed of the
dividend if such information is obtained subsequent to the ex-
dividend date. Interest income is recognized on an accrual basis.
3. INVESTMENT ADVISORY AGREEMENT
- ------------------------------------------------------------------------
The Funds have an agreement with Marsico Capital Management, LLC (the
"Adviser") to furnish investment advisory services to the Funds. Under
the terms of this agreement, the Adviser is compensated at the rate of
0.85% of the average daily net assets of each of the Focus and Growth &
Income Funds. The Adviser has agreed to voluntarily reduce fees for
expenses (exclusive of brokerage, interest, taxes and extraordinary
expenses) that exceed the expense limitation of 1.60% and 1.50% for the
Focus and the Growth & Income Funds, respectively, until January 1,
1999. A fee of $249,672 was waived in the Growth & Income Fund. The
Adviser has an agreement with the Funds that allows the Adviser the
ability to seek reimbursement of any waivers made to its advisory fee,
subject to the Funds' ability to effect such reimbursement and remain in
compliance with applicable voluntary expense limitations.
28
<PAGE>
<PAGE>
4. SERVICE AND DISTRIBUTION PLAN
- -------------------------------------------------------------------------
The Funds have adopted a Service and Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act. The Plan authorizes payments
by the Funds in connection with the distribution of their shares at an
annual rate, as determined from time to time by the Board of Trustees,
of up to 0.25% of a Fund's average daily net assets.
5. INVESTMENT TRANSACTIONS
- -------------------------------------------------------------------------
The aggregate purchases and sales of securities, excluding short-term
investments, for the Funds for the period ended September 30, 1998 were
as follows:
<TABLE>
<CAPTION>
Growth &
Focus Fund Income Fund
- -------------------------------------------------------------------------
<S> <C> <C>
PURCHASE
U.S. Government -- $ 11,756,238
Other $1,471,447,701 416,499,825
SALES
U.S. Government -- --
Other 594,208,304 151,953,272
- -------------------------------------------------------------------------
</TABLE>
The cost of securities on a tax basis for the Focus and Growth & Income
Funds is $869,192,826 and $299,847,060, respectively. At September 30,
1998, gross unrealized appreciation and depreciation on investments for
federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Growth &
Focus Fund Income Fund
- -------------------------------------------------------------------------
<S> <C> <C>
Unrealized Appreciation $ 21,180,077 $ 8,035,192
(Unrealized Depreciation) (48,898,443) (13,200,142)
---------------------------
NET UNREALIZED DEPRECIATION
ON INVESTMENTS $(27,718,366) $ (5,164,950)
- -------------------------------------------------------------------------
</TABLE>
At September 30, 1998, the Focus and Growth & Income Funds had deferred
Post-October capital losses of $26,111,659 and $13,120,050,
respectively. To the extent the Funds realize net capital gains, taxable
distributions to its shareholders will be offset by any unused capital
loss carryovers.
29
<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
THE MARSICO INVESTMENT FUND
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of the
Marsico Focus Fund and the Marsico Growth & Income Fund (constituting
The Marsico Investment Fund, hereafter referred to as the "Trust") at
September 30, 1998, and the results of each of their operations, the
changes in each of their net assets and the financial highlights for the
period December 31, 1997 (commencement of operations) through September
30, 1998, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Trust's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 1998 by correspondence with
the custodian, provide a reasonable basis for the opinion expressed
above.
/s/ PricewaterhouseCoopers LLP
Denver, Colorado
November 2, 1998
30
<PAGE>
<PAGE>
SHAREHOLDER SERVICES
WE LOOK FORWARD TO HEARING FROM YOU
BY TELEPHONE
- ------------------------------------------------------------------------
Please call us at 1-888-860-8686 with any questions. A Marsico Funds
Representative is available 7 am to 7 pm (Central Time) Monday through
Friday and our Automated Teleresponse Service is available 24 hours a
day.
When you call you may choose from the following options:
1 TO HEAR DAILY PRICE INFORMATION
2 IF YOU ARE A CURRENT SHAREHOLDER, YOU MAY ACCESS THE FOLLOWING
INFORMATION:
1 For account inquiries, including your account balance and
transaction history
2 To request duplicate statements or order duplicate tax forms
3 For Fund information, including general Fund descriptions,
current Fund pricing and Fund performance
4 To select another account
5 To change your PIN number
3 IF YOU ARE INTERESTED IN THE MARSICO FUNDS OR WOULD LIKE TO ORDER
INFORMATION.
At any time during your call, press 0 for a Representative or *
for the previous menu.
BY MAIL
- ------------------------------------
The Marsico Investment Fund
Sunstone Distribution Services, LLC
P.O. Box 3210
Milwaukee, WI 53201-3210
BY COURIER
- ------------------------------------
The Marsico Investment Fund
Sunstone Investor Services, LLC
207 East Buffalo Street, Suite 315
Milwaukee, WI 53202
DISTRIBUTOR
- -------------------------------------
Sunstone Distribution Services, LLC,
Distributor
31
<PAGE>
<PAGE>
Visit our website
There you'll find valuable information about the Marsico Funds:
* Check the Funds' daily prices
* Compare the Funds' performance against the S&P 500 Index
* Find answers to the most commonly asked questions
* Check out the top five holdings for the previous month
* Read about Tom Marsico's outlook for the market
And soon, our new and improved website will be available where
you can also:
* Access your account, check your balances and transaction history
* Learn more about Tom Marsico, the team he works with and the
investment process they use
www.marsicofunds.com
<PAGE>
<PAGE>
MARSICO FUNDS
P.O. Box 3210, Milwaukee, WI 53201-3210 [MARSICO LOGO]
1-888-860-8686 We do the work. (SM)
